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Trademark Trial and Appeal Board Enters Twenty-First Century

By Connor D. Jackson, Litigation News Contributing Editor – January 16, 2017

The U.S. Patent and Trademark Office has finalized amendments to the Trademark Trial and Appeal Board (TTAB) practice rules. Key changes include caps on discovery requests, discovery "proportionality," and stricter motion deadlines. The most significant change—and possibly most problematic—allows parties to unilaterally choose to provide trial testimony via affidavit, which may delay TTAB proceedings and be inconsistent with federal court rules.

Trial Testimony via Affidavit Inconsistent with Federal Rules, Inefficient
The TTAB has long allowed testimony via affidavit by stipulation of all parties. But under the new rules, a party may elect to do so unilaterally (although the opposing party retains their right to later oral cross-examination). According to ABA Section of Litigation leaders, this change is inconsistent with federal rules, which have more stringent witness testimony standards compared to the TTAB and injects unnecessary inefficiency into to TTAB proceedings—outcomes that are inapposite to the purpose of the amendments.

"Testimony via affidavit may end up being more expensive and less efficient because it shifts cross-examination to later in the process, hampering evaluation of witness credibility and getting to the heart of the dispute," says Mary Margaret L. O'Donnell, Birmingham, MI, cochair of the Trademarks Subcommittee of the ABA Section of Litigation's Intellectual Property Litigation Committee.

Additionally, prior to the adoption of the final rule, one commenter expressed concern about this change and its interplay with recent U.S. Supreme Court decision B&B Hardware v. Hargis Industries. There, the Court held that TTAB proceedings may have preclusive effect in federal court litigation. The final rule, however, states that the "ability to elect cross-examination of the witness in the new unilateral procedure maintains the fairness and weightiness of board proceedings."

Even so, it is not clear what result, if any, this change will have on issue preclusion in federal court. "Testimony by affidavit effectively permits ex parte testimony, which diverges from federal court practice, and thus it may call into question whether TTAB proceedings will still have a preclusive effect under B&B Hardware after these amendments," observes Tiffany D.W. Shimada, Salt Lake City, UT, cochair of the Young Lawyer's Subcommittee of the Section's Intellectual Property Litigation Committee.

Streamlined "Proportionality" Discovery, Less Paper
Changes designed to streamline TTAB proceedings include prompt resolution of discovery disputes after the close of discovery (the old rule permitted disputes up to the start of trial); capped discovery requests (before the change, there was no express limit); and tighter deadlines to file a motion for summary judgment (previously the deadline was the eve of trial).

The amendments also implement discovery "proportionality," which follows a similar 2015 federal rule change. Now, the resources of the parties and issues in dispute guide discovery obligations. "The proportionality requirement is particularly important when one party has vastly more resources because it helps to level the playing field," says O'Donnell. "Discovery proportionality creates an implicit incentive for the parties to consider how much they need the requested discovery, which reduces costs across the TTAB," agrees Shimada.

Other changes simply codify common TTAB practices. Now, Interlocutory Attorneys (TTAB attorneys) may participate in discovery conferences at their option and as it "would be beneficial," to facilitate settlement. Remote hearing attendance is expressly permitted. And non-dispositive matters may be addressed by paralegals. "All-in-all, remote hearing attendance and greater involvement of TTAB staff and attorneys are welcome changes for busy litigators," says O'Donnell.

Like federal court proceedings, TTAB proceedings have been moving steadily away from paper filings, but under the new rules, electronic filings and discovery will be required. The final rule notes, for most practitioners, this change simply codifies their current practice, as 95 percent of all filings are already electronic.

"Aside from the obvious efficiency gains, requiring electronic service may eliminate discovery shenanigans," says O'Donnell. Under the old rules, absent party agreement, litigants were afforded five extra days to respond to discovery to account for mail delay. "Although uncommon, some litigants may have used the extra five days from service by mail just to impose delay, so doing away with the extra time eliminates this possibility for gamesmanship," says O'Donnell.

Good, but Maybe Not Enough
Although the new rules significantly streamline TTAB proceedings, they do not address the TTAB's relative lack of discovery enforcement power. "Unlike federal courts, which have wide leeway to manage discovery, the TTAB is more limited in the types of sanctions it can impose for recalcitrant parties," says O'Donnell. And without broad discovery enforcement powers, litigants do not suffer much consequence for nonresponsive discovery responses and objections, delaying proceedings.

"Perhaps we will see additional changes as technology becomes more ingrained in our processes," says Shimada.

Overall, experts laud the amendments, as the last major rule change was nearly a decade ago. "As a whole the amendments will likely increase efficiency and reduce cost," says O'Donnell. "Besides, in this day and age, it is most efficient to use electronic discovery and pleadings," echoes Shimada.

Keywords: Trademark Trial and Appeal Board (TTAB), discovery, proportionality, rules, B&B Hardware

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